Respuesta :
Ivers, Inc. purchased 100 shares of its own $10 par value common stock for $20 per share. The journal entry to record this transaction would include Debit to Treasury Stock; credit to Cash.
Treasury stock, also known as treasury stock or repurchased stock, refers to previously issued shares that the issuing company has repurchased from its shareholders. As a result, the total number of shares outstanding on the open market is reduced.
A company has surplus funds and cannot find attractive investment destinations. As a result, we have decided to purchase 10,000 of his 300,000 common shares held by shareholders. The market value of 10,000 shares is $40 per share.
Advantages of a company owning treasury stock include limiting external ownership and stockpiling shares to be issued to the public in the future should it need to raise capital.
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